Building products maker James Hardie has reported a first quarter operating profit of $US52 million ($A56.91 million). This is a 19 per cent increase from the previous corresponding period.
AAP reports that housing conditions in the United States and Australia are currently improving and James Hardie is expecting that profits will remain steady as a result.
The company’s net profit of $US142.2 million increased from $US68.5 million. This figure includes the company’s asbestos liabilities.
According to MyWealth, recently there has been a notable increase in these asbestos claims and the cost of some of them has been higher than expected.
There were 156 claims settled during the quarter. This compares with the expected figure of 136 claims for the period.
As The Age reports, the company is not yet certain of when the asbestos claims will peak. This may happen years from now.
For the past few years, James Hardie actuaries had believed that the claims would peak in 2011. But not only have the number of claims for this period been greater than expected, but the payout amounts have also been higher than expected.
This is expected to put pressure on the compensation fund that is being used to compensate those who were exposed to James Hardies' asbestos products.